As the Bitcoin halving scheduled for April at the end of this year approaches, financial company Cantor Fitzgerald recently released The report indicates that the profitability of major listed BTC miners could be severely affected following the halving.
Eleven of the 13 miners, including notable names like Argo Blockchain and Hut 8 Mining, may struggle to remain profitable.
Evaluation of profitability of top miners after event
This impending halving will halve the rewards miners receive, which is an inherent mechanism in BTC’s design to preserve scarcity. While this event is often seen as a bullish catalyst for the price of BTC in the long term, it also poses challenges for mining operations, especially those with significant overhead costs.
Cantor Fitzgerald’s analysis, which highlights the “all-in” cost per Bitcoin, estimates that only two miners – Bitdeer and CleanSpark – are likely to remain profitable under the new reward structure, assuming BTC’s price remains above the $40,000 threshold. .
Meanwhile, Argo Blockchain (ARBK) and Hut 8 Mining (HUT) were designated as the most at-risk companies, with an expected cost per Bitcoin exceeding $60,000 after the halving.
The report also indicates that industry majors Marathon Digital (MARA) and Riot Blockchain (RIOT), with market caps of $3.62 billion and $2.19 billion respectively, may also struggle to remain profitable.
The estimated cost to produce a single BTC halving is approximately $50,559 for Marathon Digital and $43,913 for Riot Blockchain.
Moreover, despite the impending challenges, there are bright spots in the report. Bitdeer and CleanSpark emerged as the most efficient miners with lower “all-in” costs per Bitcoin at $17,774 and $36,896, respectively.
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Bitcoin (BTC) latest price action
In particular, the broader Bitcoin market is currently showing signs of recovery, which could have a positive impact on the mining industry. Despite the recent decline, the price of Bitcoin has risen slightly and is currently trading above $41,000.
However, this rise follows a downward trend over the past two weeks, with the asset down significantly from its high above $48,000, down 10.4% over that period.
Meanwhile, Bitcoin miners are reportedly increasing selling pressure as the halving event approaches. On-chain data shows a sharp rise in the Miner Presence Index (MPI), suggesting increased selling activity.
MPI tracks miner outflow rates over a 365-day moving average. A value greater than 1 indicates the possibility of a large selloff that could put bearish pressure on the Bitcoin price.
Miners Selling Bitcoin Holdings Ahead of Halving – Strategic Move
“In fact, the flow is #Bitcoin The movement from miners to exchanges is now three times higher than the movement from exchanges to miners. “These trends indicate strong selling pressure from the mining community.”
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— CryptoQuant.com (@cryptoQuant_com) January 25, 2024
Featured image by Unsplash, chart by TradingView